Farm bill, trade talks present cotton challenges for 2007

Allen Helms turned the National Cotton Council chairman’s gavel over to John Pucheu at the conclusion of the council’s annual meeting in Austin recently and said in an interview with Farm Press Staff that he expects Pucheu to tackle challenges even tougher than the ones Helms faced last year.

“The farm bill will be the main challenge for 2007,” Helms said. “We have already heard a lot of negatives (about the farm program) and we have a lot of critics who believe them.”

He’s also concerned about the global economy that has changed U.S. competitiveness. He said the cotton industry has a lot of questions about China. “How much cotton will they import and when will they need it? Also, we’re watching increased production in India. They have changed from an importing nation to exporting and they will export more (cotton).”

Helms said both China and India are on economic upswings, which indicates more consumption. “That presents us with a market opportunity,” he said. “We will take every opportunity available to be as big a part of that market as possible.”

The big target, he said, is not competing cotton countries but synthetic fabrics. “We have to hold our share of the fabric market against synthetics.”

Helms said potential to reinvigorate the domestic textile industry seems unlikely. “We may see it stabilize,” he said. “A slight increase is possible but unlikely. It would take some kind of special program to revitalize domestic textile manufacturing and make it more competitive. I’m not sure how we can do that. It would take a good program to even the playing field.

“A domestic industry would be the best customer we could have. They want U.S. cotton.”

Step 2 impact

Helms said Pucheu will head the council during the first year without a Step 2 program. “Impact of losing Step 2 appears to be significant,” Helms said.

He said removing that tool impedes both export and domestic marketing.

He said NCC has a lot of work to do on flow and bale moisture. The council adopted new resolutions dealing with both of those issues. Helms appointed a task force to study the slow movement of cotton out of warehouses and to shippers. NCC delegates adopted task force recommendations to identify and eliminate bottlenecks in cotton movements.

“We have to identify how we can improve the transportation of cotton,” Helms said. “We’re also working out the bale moisture issue. It’s too important not to.”

Helms said he was pleased with the level of cooperation among various industry segments during the year and at the annual meeting.

“Delegates had a mindset not to let issues interfere with the bigger picture of getting the job done,” he said. “We had extraordinary cooperation among the segments to move positions enough to let everyone agree. But that’s a tradition of the council. We need to be together and this year we did a good job of that.”

Helms said the Doha Round of WTO negotiations continues to affect farm policy debates. “As long as it is not declared over and done with, it’s a factor,” he said.

Trade promotion

He’s also concerned about trade promotion authority, set to expire this summer. “There is a question whether we’ll get TPA renewed,” he said. “Most don’t think we’ll get a WTO or any other trade agreement without TPA.”

He said the trade promotion authority faces a lot of opposition. “I don’t know what would change people’s minds,” he said. “It’s certainly not a given that it will be reauthorized. But we see a fair amount of support. A lot of interested parties are committed to work for it and there is bi-partisan support.”

Helms said ag committees in Congress have “strong leaders who understand what cotton needs and wants. We have good representation from cotton states in the House but only one in the Senate. We have a bigger job to do in the Senate.”

Helms said Pucheu would take over as chairman of an organization with “sound policies, committed leaders and strong support. That’s been the reason for the council’s success and will continue to be so.”